All Forum Posts by: Terry Campbell

I've been 'involved' in about 40 million sf of new self storage development, have been a partner on a 76,000 sf facility that has been sold and am a partner in a new 120,000+ sf facility that is about to break ground. You can make more money by building vs buying if you can stomach the process that you have to go through. The key is building in the right location. You need to have a feasibility study done by someone who has a lot of experience in the industry. Then you have to manage the construction time and costs. Once you get it built, the fun starts....getting those units rented. From the day you open until you break even is sweat time. You have to be sure that you have enough working capital to make the payments and pay the operating expenses. There is a rental season in most areas as well unless you just have a major pent up demand, so you will want your opening to coincide with the beginning of that season if possible. Self-storage conversions are also great opportunities....this is where you take an existing building and convert it to self-storage. You can get into the business much faster sometimes than you can by starting from the ground up. You can make good money buying an existing facility too, but it really should be a situation where there is a value add possibility such as a mismanaged facility where rates haven't been kept current or there have been delinquencies or maybe an opportunity to expand. I was with a self-storage building supplier for over 20 years before becoming a self-storage lender, so I have seen the business from different perspectives and I enjoy passing along info as I can to those looking to become part of our industry.

It sounds like you are purchasing the real estate and the business. With the new SOP, if you are putting in 10% equity, only half of that can come from the borrower and be counted as equity and has to be on standby with no repayment for the full life of the loan.

There are several references on this thread about the upcoming Self-Storage Academy event in Orlando that Scott Meyers and team presents. I have been to many of these and I speak at virtually each one about financing, particularly SBA financing, and I must say that the presentations and presenters at these events are very insightful and give you a LOT of info on what to look for, how to underwrite a deal and how to buy a self-storage facility. To a lender, spending your time and resources to attend this event helps give you more credibility and makes you a better candidate with the training and the many years of experience that you will have access to from this course. I hope that I will see you there this week in Orlando!

SBA wit some seller carryback.

I am partial to self-storage myself. Low overhead, low maintenance, very few, if any employees, and with $500 thousand in hand, you could potentially get into a $5 million project without partners if you used an SBA loan. I've been in single family before but have been in self storage 23 years and it is by far my favorite. With month to month rents agreements you can adjust your rates anytime. If you have a facility with 500 units and you only raise your rents by $5 per month, you increase your income by $30,000 per year! Put a cap rate of just 8 on that and you just increased your value by $375,000.

Conor, Would you pm me with your contact info? Thanks

If you can have a partner(s) that qualify and you remain less than 20% ownership, an SBA loan could still be a possibility and you could get the benefits of the program.

Scott's program is very good. I have been to several of them, as I speak at them, and I have seen consistent real world information there. The people who teach are experienced self storage folks and not just people trying to sell you something. Some of the other websites mentioned on here are great too. There is also another resource for learning about the industry at https://www.liveoakbank.com/small-business-loans/self-storage-loans/self-storage-knowledge-bank-form/. Scott's academy can help put it al together from what to look for in a property, how to create value, how to finance and how to operate.

Michael, 

one method that I failed to mention was a kiosk so that you can rent units after hours. we used one at the last facility that I was a partner in and it did help to rent more units. today, you can still use the kiosk or even software that allows you to use your smart phone as a kiosk. we didn't use any other methods expect parking and we didn't have a lot of extra room for it, but it was extra income. there are different rules and laws when you are involving something with a title, such as a car, RV, etc. 

Lukas.

They are referred to as Feasibility Experts. there are several out there, but only a handful that really focus and specialize in self storage. you can find them online or PM me for suggestions.